Are you working on filling out a tax return for your small business?
Filing tax returns is an essential part of running any business. Yet navigating the tax system can seem daunting.
You need to understand what every term means and how to calculate your taxes. Thankfully, we can help you know the ins and outs of filing tax return for a business.
Read along to learn more.
Employer Identification Number
Your company’s federal tax identification number is an Employer Identification Number (EIN). You will need an EIN if you have workers or your company is a corporation or a partnership.
You will also need an EIN if you have a Keogh plan (tax-deferred pension) or withhold taxes from a non-resident alien’s earnings. EIN is also required if you file tax returns for employment, excise, alcohol, tobacco, and firearms.
Tax Return for Business
There are five major types of business taxes. These are income tax, estimated taxes, self-employment tax, payroll taxes, and excise tax.
If you’re starting a business, you’ll need to know a thing or two about filing a tax return. You’ll need to file a separate tax return for your business.
File it by the 15th of April and include your business income, expenses, and gains or losses.
How to File a Tax Return
Business tax returns can be filed either electronically or by paper, but the vast majority of businesses file electronically.
If you e-file, you will need to file Form 940 for your annual federal unemployment tax return and your state unemployment tax return. Generally, you will also need to file a schedule C to report any business income or losses and a schedule F if you have any agricultural income or expenses.
In addition, you will likely need to file a Form 1120 or 1120S if your business is incorporated or an LLC.
Filing a Tax Return
Paying taxes can be a complex and time-consuming task, mainly if your business is large or has multiple revenue streams.
To help simplify the process, here are a few key things to know about filing a tax return for your business.
The first step is determining which tax return form your business will need to file. Next, you’ll need to gather all necessary documentation, such as receipts, invoices, and bank statements.
Then, you’ll need to complete the tax return form by hand or using tax preparation software. Finally, you’ll need to file the tax return form with the IRS online, by mail, or in person.
Seek Professional Help
Is it necessary, however, to do everything by yourself? Then there come issues such as back payroll tax resolution and the like.
Seeking professional help in situations like this should not be viewed as a sign of weakness. Hiring accountants and trained tax experts is a wise investment.
These Are the Things You Should Know About Tax Return for a Business
Tax return for a business is an essential step in ensuring business continuity. This means knowing how to file a return and understanding what information you need to include.
Preparing and keeping good records can make tax time much less stressful. If you have any questions, don’t hesitate to reach out to a tax professional for help.
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